As the holiday season approaches, we are bombarded with offers to spend our hard-earned money and valuable time on gifts, entertainment and travel. Much of that spending is driven by tradition and expectations, but what if we chose to make these next few months about more than just throwing money at retailers? If you want to give the gift of savings this holiday season, here are some alternatives to consider in lieu of – or to pair with – planned gifts.
4 ways to give the gift of savings:
- Roth IRA contributions – did your child or grandchild have earned income (ex. W-2 income) in 2017? If so, help them open a Roth IRA and make the initial contribution. The maximum contribution for 2017 is the amount of earned income or $5,500, whichever is less, and assuming no income limitations are met. Once established, this account could also be used to incentivize future savings. For example, tell your child or grandchild that next year, you will match their savings into the account dollar for dollar– up to the yearly contribution limit.
- Asset protection plans – is someone in your family getting an expensive new phone or tablet this year? Or maybe there’s a new driver in your household? Consider purchasing a warranty for their new device or a roadside assistance membership. A small investment on the front end can save a lot of time and money on the back end.
- College funding – the saying “a little goes a long way” could not be more true than in the context of paying for college. Whether your first child was born this year, and you want to open a 529 plan for her, or your youngest grandson is a freshman, and you want to help him pay for textbooks, both alternatives will make a lasting impact.
- Volunteer – save yourself the hassle of hosting the entire extended family for the afternoon, and arrange to make an impact in the community instead. Organize a shift preparing meals for those in need and then have a potluck meal together afterwards. Re-allocate your gift budget towards an adopt-a-family program and spend time shopping together with your family or friends. There are countless ways to show you care.
Embrace savings this holiday season, and be an example to those around you!